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CanadaWater

2017 Associate Salary Bump (Toronto)

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5 minutes ago, CanadaWater said:

Not at all.  In fact, I agree with you that the "Seven Sisters" distinction is largely bullshit.  The point I'm trying to make is that the "Seven Sisters" concept is used by certain decision-makers at Blakes, Osler, McCarthys, etc. to justify not making salary adjustments in line with other firms, who by many other metrics would be competitors.  This argument doesn't apply to Davies.  Decision-makers at the other Seven Sister firms would (and do) say they don't compete with Davies for work or talent (again, bullshit reasoning - people from Torys/Blakes/Dentons/etc. work across from people at Davies all the time).  

Interesting!  From your perspective (being or knowing someone that has access), would you say that those considerations would exist primarily in the recruitment context or from a strategic standpoint as well?

I'm just thinking, it would kind of make sense for Osler or Blakes to assume they only have to match other "Sisters" firms because there is a sufficient critical mass of students consistently misinterpreting the market to believe that they don't have to pay a premium to attract that talent.  But I'd be surprised to hear that they make other strategic decisions on the basis that they believe they only have five peers.

(I actually understand the Davies argument somewhat, given the sectors in which they opt not to compete and the volume they decline to process.)

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I've also just realized that I haven't thrown out my usual disclaimer.  I'm not against rankings generally, and I'm not just sour grapes guy; it's that the market is vastly different than it was in 2001 and isolating seven firms didn't even make any sense then.

You can legitimately have a Fab Four or a Wild Fourteen, but Seven Anythings hasn't made any sense in decades, if ever.  I'm more than comfortable saying there's a tier of firms out there with elite clients and work that my firm infrequently gets to deal with.  It's just not seven; and if it is, it's not that seven.

And, along those lines, although I think you can safely say that although Blakes, Osler, Stikes and McCarthys are almost always ranked in the top four in terms of M&A and very rarely displaced, there isn't typically a huge gulf in terms of deal size down to #5.  So you can call them the best firms in Canada for M&A without too much debate, I think.  But it's hard to say they're on a different tier entirely.

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25 minutes ago, Uriel said:

 

Interesting!  From your perspective (being or knowing someone that has access), would you say that those considerations would exist primarily in the recruitment context or from a strategic standpoint as well?

 

Yes, 100%.  From what I've seen/heard, senior people at those firms in decisions making roles care a lot about what their perceived competitors are doing/not doing.  Regardless of whether its an outmoded way of thinking, the "Seven Sister" concept still carries a lot of weight in certain circles.   

Associates (at least the ones that I know) generally think these distinctions are ridiculous.  

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Posted (edited)
58 minutes ago, Adrian said:

If the Seven Sisters distinction is bullshit, why would the people in the best position to know that use it as any sort of metric?  Do you work in a law firm? 

You can find sources to support virtually any argument in this context.  For example, look at the Chambers rankings for corporate/M&A and litigation in Canada (and the firms that appear in bands 1-2): 

https://www.chambersandpartners.com/18251/354/editorial/20/1

https://www.chambersandpartners.com/18251/467/editorial/20/1

The bullshit comes in when you start applying these rankings to compensation.   For example, why should a litigation associate at BJ make more than a litigation associate at McT?  I doubt there's actually a compelling reason, but firms will often say that they only compare themselves with a certain subset of competitors (which conveniently all pay the same salary).  

Edited by CanadaWater

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^ That raises a point a lot of students miss entirely.  Virtually all rankings focus on M&A because it's easily quantifiable.  Only about 20% of you that go to Bay Street are going to work anywhere near that area.  

If you were to do a power ranking of litigation departments or real estate departments or securities advisors, it wouldn't look anything like the "Seven Sisters" concept at all.

In my world, the best firms are Lenczner, Blakes, Stikes, Norton Rose, Faskens, McCarthys, Osler and a couple of folks over at Davies, BJ and Stockwoods.

Reputation matters, but it's often the reputation of a single department, or even a single partner you're working under.  Blakes might be Canada's pre-eminent firm, but there are certain practice areas where they'll be laughed out of the room.

Like most Bay Street firms, mine is the top firm in Canada, or at least top three, in a few specific practice areas because of the clients our partners have and the expertise they have developed in their industries.  But overall we don't process the volume of deals or (generally) the mega-conglomerate clients that the Blakeseses of the city do.  So we do get world-beating clients, ones the top firms drool over and fight for, but just in those specific areas.  We don't generally represent the Fortune 100 by default.  

Expertise and reputation is specialized.  Just being part of a generally good firm doesn't rub off too much on you if you're an unknown quantity.  It just suggests that, if you're working in an area of strength for your firm, you might have access to good advice.  No matter which firm you're in, if you're in a leading practice, you'll be recognized as such by your peers.

Like, if you want to be famous as the best real estate lawyer in Toronto, you could do a lot worse than going to Aird & Berlis.  If you want to work in entertainment law, Goodmans and Cassels Brock could get you access to the best clients.  IP?  Gowlings is throwing elbows to keep itself ahead of the pack.  It's not enough to be at a good firm if you want to be well reputed.  That only impresses law students.  To impress your peers and to get the best clients, you have to be in a leading practice.

All by way of saying, when I get a statement of defence in from a Bay Street firm I don't sweat it; I just have a good sense they're likely to be organized.  When I see that it's from Blakes, I don't sweat it.  I don't know anything about that person.  When I see that it's from Gord McKee, I pour myself a drink.

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1 hour ago, SlightlyObsessed said:

Prestige discussion aside, apparently more bay street firms are following the above raises.

Source and firms? 

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I have direct sources that have confirmed the numbers for Faskens and also a similar pay raise scale for a seven sister firm, each of which I understand took effect as early as this week (although Faskens may have been a few weeks ago). One caveat - I understand that only the 2nd year salary raise is fixed, the others are "up to" the amounts shown by the OP. 

Its great to see progress on the salary-raise front in Toronto, but keep in mind that these are the first set of raises (outside of BJs and Davies) in over a decade and on first blush seem to only (or maybe not even) cover inflation for those years actually getting a raise (sorry first years). In keeping with tradition on Bay street, I expect these increases will be made across the board (in some form, perhaps others will offer better discretionary bonuses) at most large, Bay street firms and will also be used as an excuse not to raise the salaries for another extended period of time. 

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3 minutes ago, SuffolkJD said:

...similar pay raise scale for a seven sister firm..

I also heard this today from a very reliable source. The numbers sounded the same or similar to those described above for Faskens. 

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1 minute ago, SuffolkJD said:

Its great to see progress on the salary-raise front in Toronto, but keep in mind that these are the first set of raises (outside of BJs and Davies) in over a decade and on first blush seem to only (or maybe not even) cover inflation for those years actually getting a raise (sorry first years). In keeping with tradition on Bay street, I expect these increases will be made across the board (in some form, perhaps others will offer better discretionary bonuses) at most large, Bay street firms and will also be used as an excuse not to raise the salaries for another extended period of time. 

 Would've loved to see Year 1 finally bumped to 110k or 120k but I suspect you're right. Thanks again for the insight. 

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Although it may seem somewhat meaningless to those not vying for Bay street jobs, I think there is a connection (we can argue how strong) between salaries on Bay street and salaries in other legal fields and geographic areas (a rising tide lifts all boats?). That the raises were so low (at least in inflationary terms), and the first to occur in almost a decade, does not bode well for salaries in other geo/legal areas. I appreciate that there are many factors pushing legal fees (and by extension, salaries) down, and from that perspective I do not take issue necessarily with the fact that the raises were so low (clients and economists could make convincing arguments to keep fees and salaries low), more so with what that means for the profession. Anecdotally, I know the spread between Bay street associate salaries and per-partner income is not insignificant at many firms, so the tension I think lies more inside the firm (i.e. associates pushing for more share of a shrinking pie).

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I have it on good authority that another firm announced across-the-board associate raises today (including for first year associates).

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Blakes. First year associate salary to $105k. No specifics for second year and beyond, but apparently quite a bit more for mid-level associates.

Just to get all the other firms out there: I've heard Fasken was the first to move (ie the firm mentioned in CanadaWater's post) and followed by Osler. Also some rumors about Stikes either already having moved, or about to. But this is all third hand, so I could well be wrong.

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Two more as-yet-unreported firms reportedly deliberating over an increase.

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46 minutes ago, BillyBishop said:

Why would anyone want to practice law in Canada when you have to article for a full year?

This seems like bait, but I'll bite. For the vast majority of people who want to practice law, Canada is the only option. Even then, lots (most?) people would rather article than drop everything to become a New Yorker.

But, more constructively, if any part of the first-year raise is because Bay Street is feeling pressure from New York, Toronto firms should also revisit their hire-back policies. I suspect a big draw for indebted risk-averse law students is New York's near-100% offer rate. It is crazy to ask students to roll the dice twice: first to get an articling position, and then again to get hired on. (New York's perceived relative friendliness towards clerking also seems very popular.) Not original observations, I know.

Anyway, glad to see this is happening.

Edited by onepost

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It's far from clear whether all firms will adopt a higher payscale (though most likely will).  If I were a 2L going into in-firm interviews, this would be a major consideration. 

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